Shares of Dell Technologies fell in after-hours trading after the company reported quarterly earnings below expectations and gave a mixed revenue forecast for the current quarter.
The maker of data center infrastructure and personal computers reported earnings per share of $2.68, excluding certain costs such as stock compensation, which was higher than Wall Street expectations of $2.53 per share, reports SiliconANGLE.
In terms of sales, Dell fell short of expectations. Sales totaled $23.9 billion in the quarter, up 7% from a year earlier, but well below analyst consensus of $24.55 billion. Net profit rose to $1.53 billion, compared with $1.21 billion a year earlier.
Dell shares fell 2% after the close. Over the past two years, shares have risen more than 50% due to strong demand for AI servers with Nvidia’s graphics processors, including the latest Blackwell chip. Dell is one of the world’s leading suppliers of Nvidia-based servers and sells them to Elon Musk’s xAI, among others.
Dell’s COO Jeff Clarke said in an interview with analysts that the company sold about $10 billion worth of AI servers in fiscal 2025. He expects that to rise to $15 billion in the current year. So far, it already has $4.1 billion worth of AI server orders yet to be fulfilled.
For the current quarter, Dell expects revenue between $22.5 billion and $23.5 billion, slightly below the analyst consensus of $23.59 billion. Earnings expectations of $1.65 per share are also below the forecast of $1.76 per share.
For the full year, Dell anticipates revenue between $101 billion and $105 billion, which is largely in line with analyst expectations of $103.17 billion. Earnings per share are expected to be $9.30, just slightly higher than the forecast of $9.23.
Infrastructure division grows, PC market lags
Revenue growth last quarter was mainly driven by the Infrastructure Solutions Group, which includes server products, storage arrays and networking equipment. Revenue from this division rose 22% to $11.35 billion, but fell short of the analyst forecast of $11.7 billion.
The ISG division is running well, although the transition to Blackwell caused some volatility in the quarter, was the view of Dave Vellante. He is chief analyst at research firm theCUBE Research. He also points to a large deal with xAI, which increases the order book and will lead to additional revenue in the coming quarters.
The Client Solutions division, which includes PC sales, posted revenue of $11.88 billion, up 5% from last year. However, analysts were counting on $11.98 billion. Dell announced that it is increasing its annual dividend by 18%, to $2.10 per share.
Competitors disappoint
Dell was not the only technology company to disappoint investors. HP and NetApp also posted disappointing results, causing their shares to fall after the close.
HP reported a mixed performance, with earnings of $0.74 per share, just below the expected $0.75. Revenue rose 2% to $13.5 billion, exceeding the forecast of $13.39 billion.
For the second fiscal quarter, HP expects earnings between $0.75 and $0.85 per share, lower than the consensus of $0.86. This forecast includes a negative impact of $0.13 due to restructuring charges. In response, HP shares fell more than 3%.
NetApp was hit even harder, with a share price drop of more than 14% after lowering revenue and profit expectations for fiscal 2025. The company attributed this to weak demand for data services.
NetApp now forecasts adjusted earnings between $7.17 and $7.27 per share, lower than its previous forecast of $7.20 to $7.40. Revenue expectations have been lowered to a range of $6.49 billion to $6.64 billion, compared with the previous estimate of $6.54 billion to $6.74 billion.
Last quarter results were also disappointing, with earnings of $1.91 per share (in line with expectations), but revenue of $1.64 billion, below the forecast of $1.69 billion.